Joe Biden’s decision to not seek re-election isn’t unprecedented in U.S. history; presidents like James Polk and Lyndon B. Johnson also chose not to run for another term for various reasons. However, what sets Biden’s decision apart is the timing, coming just a month before the Democratic National Convention, shortly after he asserted that the party elites wouldn’t force him out. This unexpected announcement caused a surge in betting activity on the Polymarket prediction market, resulting in unprecedented trading volumes.
According to data from Dune Analytics, the daily volume on Polymarket skyrocketed to over $28 million, a significant increase from the $4 million to $5 million average daily volume following a debate between Biden and Trump. This debate had intensified calls for Biden to step down, contributing to the increased market activity. Additionally, the number of daily active accounts on Polymarket doubled in the past month, rising from about 3,000 to nearly 6,000.
Bettors have invested heavily in political contracts on Polymarket, with over $500 million pooled across several key markets. The market for the U.S. presidential election winner alone has attracted $319 million, while the market for the Democratic nominee, with Vice President Kamala Harris as the favorite, has over $212 million. Another market predicting the Democratic candidate’s vice-presidential running mate has $10 million. The total amount bet is approaching the $744 million wagered on Betfair for the 2020 election. With three and a half months remaining until the election, there is speculation that Polymarket might reach $1 billion in bets.
In another notable event, a Polymarket contract regarding cat-themed meme coins saw the Solana-based POPCAT token achieve a $1 billion market cap, albeit controversially. A significant $630,000 purchase was seen as market manipulation, pushing POPCAT over the threshold. Despite concerns, Polymarket maintained its decision that POPCAT was the winner.
Additionally, a faulty security software update from CrowdStrike caused widespread issues, bricking Windows computers globally and affecting thousands of flights. Bettors on Polymarket had underestimated the impact, with the majority predicting a quick fix that did not materialize. This event further demonstrated the unpredictable nature of markets and the ripple effects of technological issues on everyday activities.
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